Intrinsic value of Fortress Transportation&Infrastructure I - FTAI

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  Intrinsic Value

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  Value-price divergence*

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FTAI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.76
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  149
  219
  339
  506
  735
  1,037
  1,425
  1,913
  2,512
  3,233
  4,083
  5,070
  6,199
  7,472
  8,890
  10,453
  12,159
  14,006
  15,991
  18,111
  20,362
  22,742
  25,247
  27,877
  30,630
  33,505
  36,503
  39,626
  42,874
  46,252
  49,763
Variable operating expenses, $m
 
  251
  381
  564
  812
  1,141
  1,565
  2,096
  2,749
  3,534
  4,461
  5,524
  6,754
  8,141
  9,686
  11,389
  13,249
  15,261
  17,424
  19,734
  22,186
  24,779
  27,510
  30,375
  33,374
  36,507
  39,774
  43,176
  46,716
  50,396
  54,222
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  190
  251
  381
  564
  812
  1,141
  1,565
  2,096
  2,749
  3,534
  4,461
  5,524
  6,754
  8,141
  9,686
  11,389
  13,249
  15,261
  17,424
  19,734
  22,186
  24,779
  27,510
  30,375
  33,374
  36,507
  39,774
  43,176
  46,716
  50,396
  54,222
Operating income, $m
  -41
  -31
  -42
  -57
  -78
  -105
  -139
  -183
  -237
  -301
  -378
  -454
  -555
  -669
  -797
  -937
  -1,089
  -1,255
  -1,433
  -1,623
  -1,824
  -2,038
  -2,262
  -2,498
  -2,744
  -3,002
  -3,271
  -3,550
  -3,841
  -4,144
  -4,459
EBITDA, $m
  24
  54
  84
  125
  181
  256
  352
  472
  620
  797
  1,007
  1,251
  1,529
  1,843
  2,193
  2,578
  2,999
  3,455
  3,944
  4,467
  5,022
  5,609
  6,227
  6,876
  7,555
  8,264
  9,004
  9,774
  10,575
  11,408
  12,274
Interest expense (income), $m
  13
  12
  24
  43
  69
  104
  151
  211
  286
  379
  490
  621
  774
  948
  1,144
  1,363
  1,605
  1,868
  2,153
  2,460
  2,787
  3,135
  3,502
  3,889
  4,295
  4,720
  5,164
  5,627
  6,109
  6,611
  7,132
Earnings before tax, $m
  -40
  -43
  -67
  -100
  -146
  -209
  -290
  -394
  -523
  -680
  -867
  -1,075
  -1,329
  -1,617
  -1,941
  -2,300
  -2,694
  -3,123
  -3,586
  -4,083
  -4,611
  -5,172
  -5,764
  -6,387
  -7,039
  -7,722
  -8,435
  -9,177
  -9,951
  -10,755
  -11,591
Tax expense, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -20
  -43
  -67
  -100
  -146
  -209
  -290
  -394
  -523
  -680
  -867
  -1,075
  -1,329
  -1,617
  -1,941
  -2,300
  -2,694
  -3,123
  -3,586
  -4,083
  -4,611
  -5,172
  -5,764
  -6,387
  -7,039
  -7,722
  -8,435
  -9,177
  -9,951
  -10,755
  -11,591

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,547
  2,030
  3,136
  4,690
  6,804
  9,600
  13,198
  17,715
  23,261
  29,931
  37,806
  46,946
  57,396
  69,182
  82,312
  96,785
  112,584
  129,687
  148,067
  167,694
  188,538
  210,571
  233,772
  258,122
  283,611
  310,234
  337,995
  366,906
  396,986
  428,262
  460,769
Adjusted assets (=assets-cash), $m
  1,479
  2,030
  3,136
  4,690
  6,804
  9,600
  13,198
  17,715
  23,261
  29,931
  37,806
  46,946
  57,396
  69,182
  82,312
  96,785
  112,584
  129,687
  148,067
  167,694
  188,538
  210,571
  233,772
  258,122
  283,611
  310,234
  337,995
  366,906
  396,986
  428,262
  460,769
Revenue / Adjusted assets
  0.101
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
  0.108
Average production assets, $m
  1,069
  1,415
  2,186
  3,270
  4,744
  6,694
  9,202
  12,352
  16,219
  20,870
  26,360
  32,733
  40,019
  48,237
  57,392
  67,483
  78,499
  90,424
  103,240
  116,924
  131,457
  146,820
  162,997
  179,975
  197,747
  216,310
  235,666
  255,824
  276,798
  298,605
  321,271
Working capital, $m
  97
  -24
  -37
  -55
  -80
  -113
  -155
  -209
  -274
  -352
  -445
  -553
  -676
  -814
  -969
  -1,139
  -1,325
  -1,527
  -1,743
  -1,974
  -2,219
  -2,479
  -2,752
  -3,039
  -3,339
  -3,652
  -3,979
  -4,319
  -4,673
  -5,041
  -5,424
Total debt, $m
  260
  556
  975
  1,564
  2,366
  3,425
  4,789
  6,501
  8,603
  11,131
  14,115
  17,580
  21,540
  26,007
  30,983
  36,468
  42,456
  48,938
  55,904
  63,343
  71,243
  79,594
  88,387
  97,615
  107,276
  117,366
  127,887
  138,844
  150,245
  162,098
  174,419
Total liabilities, $m
  494
  769
  1,188
  1,777
  2,579
  3,638
  5,002
  6,714
  8,816
  11,344
  14,328
  17,793
  21,753
  26,220
  31,196
  36,681
  42,669
  49,151
  56,117
  63,556
  71,456
  79,807
  88,600
  97,828
  107,489
  117,579
  128,100
  139,057
  150,458
  162,311
  174,632
Total equity, $m
  1,054
  1,260
  1,947
  2,912
  4,225
  5,962
  8,196
  11,001
  14,445
  18,587
  23,477
  29,154
  35,643
  42,962
  51,116
  60,103
  69,915
  80,536
  91,950
  104,138
  117,082
  130,765
  145,173
  160,294
  176,122
  192,655
  209,895
  227,849
  246,528
  265,951
  286,138
Total liabilities and equity, $m
  1,548
  2,029
  3,135
  4,689
  6,804
  9,600
  13,198
  17,715
  23,261
  29,931
  37,805
  46,947
  57,396
  69,182
  82,312
  96,784
  112,584
  129,687
  148,067
  167,694
  188,538
  210,572
  233,773
  258,122
  283,611
  310,234
  337,995
  366,906
  396,986
  428,262
  460,770
Debt-to-equity ratio
  0.247
  0.440
  0.500
  0.540
  0.560
  0.570
  0.580
  0.590
  0.600
  0.600
  0.600
  0.600
  0.600
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
Adjusted equity ratio
  0.667
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -20
  -43
  -67
  -100
  -146
  -209
  -290
  -394
  -523
  -680
  -867
  -1,075
  -1,329
  -1,617
  -1,941
  -2,300
  -2,694
  -3,123
  -3,586
  -4,083
  -4,611
  -5,172
  -5,764
  -6,387
  -7,039
  -7,722
  -8,435
  -9,177
  -9,951
  -10,755
  -11,591
Depreciation, amort., depletion, $m
  65
  85
  126
  182
  259
  360
  491
  655
  856
  1,099
  1,385
  1,705
  2,084
  2,512
  2,989
  3,515
  4,088
  4,710
  5,377
  6,090
  6,847
  7,647
  8,489
  9,374
  10,299
  11,266
  12,274
  13,324
  14,417
  15,552
  16,733
Funds from operations, $m
  29
  42
  59
  82
  112
  152
  201
  261
  334
  419
  517
  629
  755
  895
  1,048
  1,215
  1,394
  1,587
  1,791
  2,007
  2,235
  2,475
  2,725
  2,987
  3,260
  3,544
  3,840
  4,147
  4,466
  4,797
  5,142
Change in working capital, $m
  -2
  -9
  -13
  -18
  -25
  -33
  -42
  -53
  -65
  -79
  -93
  -108
  -123
  -139
  -155
  -170
  -186
  -201
  -216
  -231
  -245
  -259
  -273
  -287
  -300
  -313
  -327
  -340
  -354
  -368
  -383
Cash from operations, $m
  31
  147
  72
  100
  137
  185
  243
  314
  399
  497
  610
  737
  878
  1,034
  1,203
  1,385
  1,580
  1,788
  2,007
  2,238
  2,481
  2,734
  2,998
  3,274
  3,560
  3,857
  4,166
  4,487
  4,820
  5,166
  5,524
Maintenance CAPEX, $m
  0
  -46
  -74
  -114
  -170
  -247
  -349
  -479
  -643
  -845
  -1,087
  -1,373
  -1,705
  -2,084
  -2,512
  -2,989
  -3,515
  -4,088
  -4,710
  -5,377
  -6,090
  -6,847
  -7,647
  -8,489
  -9,374
  -10,299
  -11,266
  -12,274
  -13,324
  -14,417
  -15,552
New CAPEX, $m
  -276
  -531
  -771
  -1,083
  -1,475
  -1,949
  -2,509
  -3,150
  -3,867
  -4,651
  -5,490
  -6,373
  -7,286
  -8,217
  -9,155
  -10,091
  -11,016
  -11,925
  -12,815
  -13,685
  -14,533
  -15,363
  -16,177
  -16,978
  -17,772
  -18,563
  -19,356
  -20,158
  -20,973
  -21,807
  -22,666
Cash from investing activities, $m
  -213
  -577
  -845
  -1,197
  -1,645
  -2,196
  -2,858
  -3,629
  -4,510
  -5,496
  -6,577
  -7,746
  -8,991
  -10,301
  -11,667
  -13,080
  -14,531
  -16,013
  -17,525
  -19,062
  -20,623
  -22,210
  -23,824
  -25,467
  -27,146
  -28,862
  -30,622
  -32,432
  -34,297
  -36,224
  -38,218
Free cash flow, $m
  -182
  -430
  -773
  -1,097
  -1,507
  -2,012
  -2,614
  -3,315
  -4,111
  -4,998
  -5,967
  -7,009
  -8,113
  -9,268
  -10,465
  -11,695
  -12,950
  -14,226
  -15,518
  -16,823
  -18,142
  -19,476
  -20,825
  -22,194
  -23,586
  -25,005
  -26,456
  -27,945
  -29,477
  -31,058
  -32,694
Issuance/(repayment) of debt, $m
  -50
  290
  419
  589
  801
  1,060
  1,364
  1,712
  2,102
  2,528
  2,984
  3,464
  3,961
  4,467
  4,977
  5,485
  5,988
  6,482
  6,966
  7,438
  7,900
  8,351
  8,793
  9,229
  9,660
  10,090
  10,521
  10,957
  11,400
  11,854
  12,320
Issuance/(repurchase) of shares, $m
  0
  234
  1,041
  1,473
  2,019
  2,688
  3,485
  4,408
  5,453
  6,612
  7,873
  9,221
  10,642
  12,120
  13,643
  15,197
  16,774
  18,365
  19,966
  21,573
  23,187
  24,808
  26,440
  28,087
  29,754
  31,448
  33,174
  34,942
  36,757
  38,627
  40,560
Cash from financing (excl. dividends), $m  
  -31
  524
  1,460
  2,062
  2,820
  3,748
  4,849
  6,120
  7,555
  9,140
  10,857
  12,685
  14,603
  16,587
  18,620
  20,682
  22,762
  24,847
  26,932
  29,011
  31,087
  33,159
  35,233
  37,316
  39,414
  41,538
  43,695
  45,899
  48,157
  50,481
  52,880
Total cash flow (excl. dividends), $m
  -214
  -140
  -354
  -508
  -706
  -952
  -1,250
  -1,603
  -2,009
  -2,470
  -2,983
  -3,545
  -4,152
  -4,801
  -5,488
  -6,210
  -6,962
  -7,744
  -8,552
  -9,385
  -10,243
  -11,125
  -12,032
  -12,965
  -13,926
  -14,915
  -15,935
  -16,988
  -18,077
  -19,205
  -20,373
Retained Cash Flow (-), $m
  112
  -476
  -687
  -965
  -1,313
  -1,736
  -2,234
  -2,805
  -3,444
  -4,142
  -4,890
  -5,676
  -6,489
  -7,319
  -8,154
  -8,987
  -9,811
  -10,621
  -11,414
  -12,188
  -12,944
  -13,683
  -14,408
  -15,122
  -15,828
  -16,533
  -17,240
  -17,954
  -18,680
  -19,423
  -20,187
Prev. year cash balance distribution, $m
 
  382
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  77.4
  42.7
  24.5
  14.6
  9.0
  5.7
  3.7
  2.5
  1.7
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Fortress Transportation and Infrastructure Investors LLC owns and acquires infrastructure and related equipment for the transportation of goods and people in Africa, Asia, Europe, South America, and North America. It operates in five segments: Aviation Leasing, Offshore Energy, Shipping Containers, Jefferson Terminal, and Railroad. The Aviation Leasing segment owns and manages 60 aviation assets, including 18 commercial passenger aircraft and 42 commercial jet engines. The Offshore Energy segment owns and leases vessels and equipment that support offshore oil and gas activities, including one anchor handling towing supply (AHTS) vessel and one remote operated vehicle (ROV) support vessel. The Shipping Containers segment engages in the acquisition and leasing of shipping containers on an operating lease and finance lease basis, which comprise interests in approximately 138,000 maritime shipping containers and related equipment. The Jefferson Terminal segment develops crude oil and refined products handling terminal at the Port of Beaumont, Texas; and other related assets involved in the transportation and processing of crude oil and related products. The Railroad segment owns a short line railroad that operates from Maine to Montreal, primarily transporting pulp and paper, construction products, and chemicals. The company serves operators of transportation and infrastructure networks, including airlines, offshore energy service providers, and shipping lines. Fortress Transportation and Infrastructure Investors LLC was founded in 2011 and is based in New York, New York.

FINANCIAL RATIOS  of  Fortress Transportation&Infrastructure I (FTAI)

Valuation Ratios
P/E Ratio -60.4
Price to Sales 8.1
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 39
Price to Free Cash Flow -4.9
Growth Rates
Sales Growth Rate 8.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.5%
Cap. Spend. - 3 Yr. Gr. Rate 25.7%
Financial Strength
Quick Ratio NaN
Current Ratio 1.1
LT Debt to Equity 24.7%
Total Debt to Equity 24.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -0.4%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -1.5%
Ret/ On T. Cap. - 3 Yr. Avg. -0.4%
Return On Equity -1.8%
Return On Equity - 3 Yr. Avg. -0.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 88.6%
Gross Margin - 3 Yr. Avg. 89.1%
EBITDA Margin 25.5%
EBITDA Margin - 3 Yr. Avg. 34.5%
Operating Margin -27.5%
Oper. Margin - 3 Yr. Avg. -21%
Pre-Tax Margin -26.8%
Pre-Tax Margin - 3 Yr. Avg. -13.5%
Net Profit Margin -13.4%
Net Profit Margin - 3 Yr. Avg. -2.8%
Effective Tax Rate -2.5%
Eff/ Tax Rate - 3 Yr. Avg. 6.3%
Payout Ratio -500%

FTAI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTAI stock intrinsic value calculation we used $137 million for the last fiscal year's total revenue generated by Fortress Transportation&Infrastructure I. The default revenue input number comes from 2016 income statement of Fortress Transportation&Infrastructure I. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FTAI stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for FTAI is calculated based on our internal credit rating of Fortress Transportation&Infrastructure I, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Fortress Transportation&Infrastructure I.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FTAI stock the variable cost ratio is equal to 117.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FTAI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Fortress Transportation&Infrastructure I.

Corporate tax rate of 27% is the nominal tax rate for Fortress Transportation&Infrastructure I. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FTAI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FTAI are equal to 645.6%.

Life of production assets of 19.2 years is the average useful life of capital assets used in Fortress Transportation&Infrastructure I operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FTAI is equal to -10.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1166 million for Fortress Transportation&Infrastructure I - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 74.55 million for Fortress Transportation&Infrastructure I is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Fortress Transportation&Infrastructure I at the current share price and the inputted number of shares is $1.2 billion.


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COMPANY NEWS

▶ Fortress Transportation posts 1Q loss   [May-05-17 05:02AM  Associated Press]
▶ Fortress Transportation posts 4Q loss   [Feb-23-17 06:57PM  Associated Press]
▶ This Is How Smart Money Is Trading Kaman Corporation (KAMN)   [Nov-22  02:07PM  at Insider Monkey]
Stock chart of FTAI Financial statements of FTAI Annual reports of FTAI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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